Is Today The Occasion To Purchase Your Residence?
It's common knowledge that the housing market in the United States is in a huge slump. While there are endless reasons for this, depending on who you ask, the truth is pretty grim. Prices are lower than ever, and nobody seems to know when they will rebound. How low they will go is anybody's guess.
Making money in real estate was simple only a couple of years ago. All you had to do was buy a decent home in a decent neighborhood, keep good care of it, and then watch the value rise through the roof. It wasn't uncommon to see the value of houses double or even triple in as short as ten years. People were getting rich right and left. Then everything fell apart overnight.
One thing that is very common today is negative equity. This is when you owe more money on your home than it's worth. That makes selling it virtually impossible. You can keep paying off your mortgage, until your equity turns positive, or you can hope that the housing market recovers, and the value of your home goes back up.
People who bought their homes just a few years ago were lucky. All they had to do was to put down a small down payment, and they were almost guaranteed their homes would increase in value. These days, nobody knows what is going to happen, so buying a home could be a big risk. What should you do in such a situation?
In order to decide what to do, check and see how long you'll be in the area for. For example, if you have a job that may transfer you to another city, buying a house may not be such a good idea. On the other hand, if you plan on living there for at least ten years, then it may be a good decision.
What's the alternative? Many people think that renting is like throwing money down into hole, never to see it again. But if you buy a house, the first five years are going to be spent paying mainly interest on your payment, so it's basically the same thing.
The bottom line is that if you can afford it, and you'll be around for a while, buying a house is probably a good idea. But if you see yourself moving in five years or less, maybe you should stick with renting a nice place.
Making money in real estate was simple only a couple of years ago. All you had to do was buy a decent home in a decent neighborhood, keep good care of it, and then watch the value rise through the roof. It wasn't uncommon to see the value of houses double or even triple in as short as ten years. People were getting rich right and left. Then everything fell apart overnight.
One thing that is very common today is negative equity. This is when you owe more money on your home than it's worth. That makes selling it virtually impossible. You can keep paying off your mortgage, until your equity turns positive, or you can hope that the housing market recovers, and the value of your home goes back up.
People who bought their homes just a few years ago were lucky. All they had to do was to put down a small down payment, and they were almost guaranteed their homes would increase in value. These days, nobody knows what is going to happen, so buying a home could be a big risk. What should you do in such a situation?
In order to decide what to do, check and see how long you'll be in the area for. For example, if you have a job that may transfer you to another city, buying a house may not be such a good idea. On the other hand, if you plan on living there for at least ten years, then it may be a good decision.
What's the alternative? Many people think that renting is like throwing money down into hole, never to see it again. But if you buy a house, the first five years are going to be spent paying mainly interest on your payment, so it's basically the same thing.
The bottom line is that if you can afford it, and you'll be around for a while, buying a house is probably a good idea. But if you see yourself moving in five years or less, maybe you should stick with renting a nice place.
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